Legislative Update - Vol. 34 No. 14 April 11, 2017 - South Carolina Legislature Online

Legislative Update, April 11, 2017

Vol. 34 April 11, 2017 No. 14

CONTENTS

HOUSE WEEK IN REVIEW...... 02

BILLS INTRODUCED IN THE HOUSE THIS WEEK...... 09

NOTE: THESE SUMMARIES ARE PREPARED BY THE STAFF OF THE SOUTH CAROLINA HOUSE OF REPRESENTATIVES AND ARE NOT THE EXPRESSION OF THE LEGISLATION'S SPONSOR(S) OR THE HOUSE OF REPRESENTATIVES. THEY ARE STRICTLY FOR THE INTERNAL USE AND BENEFIT OF MEMBERS OF THE HOUSE OF REPRESENTATIVES AND ARE NOT TO BE CONSTRUED BY A COURT OF LAW AS AN EXPRESSION OF LEGISLATIVE INTENT.

HOUSE WEEK IN REVIEW

The House of Representatives and the Senate adopted the conference committee report on H.3726, the RETIREMENT SYSTEM FUNDING AND ADMINISTRATION ACT, and enrolled the legislation for ratification. This bill implements recommendations of the joint legislative committee formed to study the unfunded liability facing the state retirement systems and propose changes that could allow the state’s pensions to remain viable by continuing to deliver benefits to retirees without undermining the state’s finances.

H.3726 decouples employer and employee contribution rates into pension systems by eliminating the required differential between the two rates which is currently set at 2.9% for the largest pension plan, the South Carolina Retirement System which serves most state government employees, teachers, various local government employees, and others, and 5% for the Police Officers Retirement System. The legislation provides for a 2% increase in the employer contribution rates for these systems effective July 1, 2017, so that the SCRS employer contribution rate will increase from the current 11.56% to 13.56% and the PORS employer contribution rate will increase from the current 14.24% to 16.24%. Each year thereafter, a 1% increase is scheduled for these employer contribution rates until Fiscal Year 2022-2023. The legislation increases and places a cap on the employee contribution rate for these systems with the SCRS employee contribution rate increasing from the current 8.66% to 9% and the PORS employee contribution rate increasing from the current 9.24% to 9.75%. The assumed rate of return on pension plan investments is reduced from 7.5% to 7.25%. Future changes to the assumed rate of return, beginning with Fiscal Year 2021-2022, are to be recommended by the Public Employee Benefit Authority, with the General Assembly afforded an opportunity to disagree with PEBA’s recommendation prior to the new rate taking effect. The total cost contemplated for state general fund agencies and the Education Improvement Act for both SCRS and PORS is $73.6 million for Fiscal Year 2017-2018 and an additional $36.8 million for each of the next 5 years. The amortization period for unfunded liabilities is reduced from 30 years to 20 years over the course of the next 10 years. By applying the 2% employer contribution rate increase in year 1, the funding period will be reduced an additional 3 years in the first year, and an additional $100 million payment would be applied to the negative interest payment, which is now approximately $220 million annually. Provisions are made for how employer and employee contributions are to be reduced should the pension systems reach the point of comparative financial health when actuaries find them to be at least eighty-five percent funded.

H.3726 implements recommendations for improving governance of the retirement systems and simplifying lines of authority which draw upon findings of South Carolina’s Legislative Audit Council and the private firm that conducted the independent audit of the state’s pension systems. The legislation provides greater definition for the role of the Executive Director of the Public Employee Benefit Authority, who is designated by PEBA’s Board of Directors and serves at the pleasure of the board. PEBA’s organizational structure is clarified such that all employees are hired by and report to the Executive Director. The legislation provides revisions for PEBA’s Board of Directors in order to: extend terms for board members from two years to four years; stagger terms so that they do not all expire at the same time; include diversity language for new appointees; allow for board members to be removed only for cause by the Governor; and, require the board to meet quarterly rather than monthly. The Board of Directors and Executive Director are named fiduciaries of PEBA, and penalties are established for failing to fulfill fiduciary responsibilities that are identical to those already established for the Retirement System Investment Commission. The legislation provides greater definition for the role of the Chief Executive Officer of the Retirement System Investment Commission, who is designated by the commission and serves at the commission’s pleasure. The organizational structure of the RSIC is clarified such that all employees, including the Chief Investment Officer, report to the CEO. Qualification requirements for the RSIC are revised to allow for a more diverse composition, including commissioners with a significant amount of broad business experience and commissioners with investment experience reliant on professional certifications. Diversity language is included for new appointees. Term limits are provided such that commissioners are allowed to serve two consecutive four-year terms. The legislation provides an additional voting member to avoid tie votes. Rather than serving on the RSIC, the State Treasurer is to appoint a member to the commission. An active stakeholder positon is added to be appointed by the Governor. A certification process is added to ensure that commission members meet qualifications. The RSIC is authorized to engage attorneys in consultation with the Attorney General on a fee basis for investment and management of assets. TheRSIC is required to cast shareholder proxy votes that are in keeping with its fiduciary duties, consistent with the best interest of the trust fund and most likely to maximize shareholder value. The legislation adds prohibitions regarding lobbyists, placements agents, and investments in which a commissioner, or an immediate family member, has an interest. Fee reporting requirements are included. The commission is authorized to delegate to the CIO, under the direct oversight of the CEO, the authority to invest up to 2% of the value of portfolio assets in publicly-traded investments or up to 1% of assets if the investments are not publicly-traded. The legislation establishes a four-year rotation schedule for fiduciary audits of PEBA and RSIC conducted by a private firm hired by the State Auditor. The legislation simplifies and clarifies fiduciary governance by reducing conflicting and overlapping authority of the State Treasurer, the State Fiscal Accountability Authority, and PEBA. SFAA approval is no longer required for implementation of PEBA policy decisions. The Treasurer is removed as the custodian of the state’s five retirement systems. PEBA and RSIC are to be co-trustees of retirement system assets and SFAA is removed as a co-trustee. The PEBA Board, rather than the Treasurer, is to be the custodian of the retirement system assets. The RSIC is afforded the exclusive authority to select the custodial bank that meets qualifications.

The House amended, approved, and sent the Senate H.3930, a bill providing AUTHORIZATION TO CARRY A HANDGUN IN PUBLIC WITHOUT A PERMIT, either openly or concealed, implementing what is often called “Constitutional carry” or “permitless carry” in South Carolina. In making its revisions, the legislation retains most of the current provisions relating to concealable weapons, including: the issuance of concealable weapons permits by the State Law Enforcement Division; the posting of notification that allows a business owner to prohibit concealable weapons on the premises; the homeowner permission required for carrying a concealable weapon into a private residence; and a list of places where concealable weapons are not allowed such as schools, daycare facilities, hospitals, courthouses, and the meeting places of government bodies. The new provisions for carrying a handgun lawfully in public, concealed or not, without a requirement for obtaining a concealable weapon permit apply only to those individuals who may legally purchase a firearm from a properly licensed and certified firearms dealer. The legislation specifies that the intent to use a handgun unlawfully against another person must not be inferred from the mere possession, carrying, use, or concealment of the handgun, whether it is loaded or unloaded. The legislation also provides for South Carolina to honor valid out-of-state permits to carry concealable weapons that are held by residents of other states, who are least twenty-one years old or military personnel of any age.

The House amended, approved, and sent the Senate H.3566, a bill establishing CONDITIONS UPON WHICH SCHOOL FIRST RESPONDERS MAYPOSSESS FIREARMS ON SCHOOL PREMISESwhile rendering aid in crisis situations. The legislation makes provisions for the Law Enforcement Training Council to develop guidelines for a oneweek training program offered by the Criminal Justice Academy to the emergency medical service personnel and firefighters who serve as school first responders which provides certification that, along with a valid concealed weapons permit, allows them to possess firearms on school premises while they are responding to a campus shooting or other emergencies.

The House amended, approved, and sent the Senate H.3969, a bill that revises SCHOOL PERFORMANCE RATINGS in establishing a single public education accountability system that meets both state and federal requirements. Through Act 200 of 2014, the General Assembly charged the Education Oversight Committee with developing and recommending a single accountability system that met both state and federal requirements. The EOC, working with the State Department of Education and other stakeholders, submitted recommendations for updating the Education Accountability Act to the General Assembly in January of this year. House Bill 3969 creates one report card with one overall rating for school performance that incorporates both state and federal requirements. Under these uniform provisions, a school’s progress towards meeting or exceeding the criteria of the Profile of the South Carolina Graduate is measured with the performance ratings of: Excellent, Good, Average, Below Average, and Unsatisfactory. The same categories of performance ratings also must be assigned to individual indicators used to measure a school’s performance, such as academic achievement, student growth or progress, graduation rate, English language proficiency, and college and career readiness. The legislation discontinues the assignment of performance rankings to entire school districts. To further increase transparency and accountability, the legislation requires that, by the 20192020 School Year, the school’s report card must be furnished to parents and the public no later than September first. The legislation makes revisions regarding which standardized tests are administered to assess student achievement. The legislation requires the state to use a valueadded system that calculates student progress or growth, and a local school district may, in its discretion, use the valueadded system to evaluate classroom teachers using student progress or growth. Confidentiality provisions are included to exempt data relating to specific teacher effects on student progress or growth from public disclosure. A longitudinal data system is established in order to better assist with policy and fiscal decisions ranging from prekindergarten to college. The Revenue and Fiscal Affairs Office, First Steps, SDE, the Commission on Higher Education, DSS, the Technical College System, the Department of Commerce, the Department of Employment and Workforce, and other state agencies and colleges are charged with establishing and maintaining the system. Working with the Education Oversight Committee, the State Department of Education shall design and pilot district accountability models that focus on competencybased education for a district or school or on regional or county economic initiatives to improve the postsecondary success of students. A district may apply to the department and the committee to participate in the pilot.

The House approved and sent the Senate H.3968, a bill providing for ENHANCED SCREENING FOR THOSE SEEKING PROFESSIONAL AND OCCUPATIONAL LICENSING AND CERTIFICATION. This bill makes revisions to add to the Department of Labor, Licensing and Regulation’s broad authority to revoke professional and occupational authorization enhanced authority to deny initial authorization so the department can deny the authorization to engage in a profession or occupation for any reason that it can revoke such authorization. The legislation’s enhanced security provisions are applied to a list of seventeen professions and occupations selected due to the likelihood that the professional may be alone with clients and vulnerable individuals.

The House concurred in Senate amendments to H.3793, legislation authorizing certain applied, non-research HIGHER EDUCATIONDEGREE PROGRAMS at four-year colleges and universities, and enrolled the bill for ratification. The legislation makes provisions for bachelor of science degrees in Mechanical Engineering and Electrical Engineering at South Carolina State University, doctoral degrees in Nursing Practice at Francis Marion University and the University of South Carolina Aiken, a doctor of philosophy degree in Education Administration at Coastal Carolina University, and a doctor of philosophy degree in Computer and Information Science at the College of Charleston. Approval by the Commission on Higher Education is required for all of these degree programs. The new degree programs are only allowed so long as new state general funds are not appropriated for their operation.

The House approved S.354 and enrolled the bill for ratification. The legislation makes provisions for DEPARTMENT OF MENTAL HEALTH CRISIS STABILIZATION UNIT FACILITIESwhere individuals entering hospital emergency rooms suffering from mental illness or substance abuse issues may be transferred to begin receiving appropriate care. This bill makes provisions for a crisis stabilization unit facility operated or authorized by the Department of Mental Health which provides a shortterm residential program offering psychiatric stabilization services, detoxification services, and brief, intensive crisis services twentyfour hours a day, seven days a week. The legislation exempts a crisis stabilization unit facility from the Certificate of Need process and requires a crisis stabilization unit facility to obtain a license from the Department of Health and Environmental Control.

The House concurred in Senate amendments to H.3438 and enrolled the bill for ratification. The legislationestablishes a protocol AUTHORIZING PHARMACISTS TO SUBSTITUTE INTERCHANGEABLE BIOLOGICAL PRODUCTS that have been approved by the federal Food and Drug Administration. Such substitutions may only be made when a practitioner’s prescription provides authorization. The legislation provides labeling requirements and establishes a process for notifying prescribers of the specific biological product that a pharmacist dispenses to a patient.

The House amended, approved, and sent the Senate toH.3823,a bill REQUIRING HEALTH CARE PROFESSIONALS TO REPORT THE EXPOSURE OF INFANTS TO ALCOHOL OR DRUGS. The legislation adds physicians, nurses, and medical or allied health professionals to the list of those who are required to report instances of suspected child abuse or neglect by mandating a report to the Department of Social Services whenever they encounter a child, birth to one year, who is diagnosed with neonatal abstinence syndrome or a fetal alcohol spectrum disorder, ora child, birth to one year, who is medically affected by the prenatal substance exposure to a controlled or illegal substance, or withdrawal from alcohol or a controlled or illegal substance. These reports do not, however, create any presumptions that child abuse or neglect has taken place. The reporter may assist DSS in developing a safety plan for these children and their caregivers. As with other mandatory reporters of suspected child abuse and neglect, provisions are included to shield those acting in good faith from legal liability.

The House amended, approved, and sent the Senate H.3864, a bill revising MOTOR VEHICLECHILD SAFETY SEAT REQUIREMENTS. The legislation updates age, weight, size, and position requirements for lawfully securing infants and children in approved motor vehicle child safety seats. Child passenger safety restraint system requirements provide for a progression from rear-facing seats for infants, to forward-facing seats, to beltpositioning booster seats, and ultimately, when a child is at least eight years old or at least fiftyseven inches tall, to a properly fitting adult safety seat belt.

The House amended, approved, and sent the Senate H.3865, the “SOUTH CAROLINA PREGNANCY ACCOMMODATIONS ACT”. The legislation enhances state laws that combat pregnancy discrimination, promote public health, and ensure full and equal participation for women in the labor force by requiring employers to provide reasonable accommodations to employees for medical needs arising from pregnancy, childbirth, or related medical conditions, including accommodations for lactation, that allow employees to remain on the job. The South Carolina Human Affairs Commission is charged with promulgating regulations to carry out this act, which shall identify some reasonable accommodations addressing medical needs arising from pregnancy, childbirth, or related medical conditions that must be provided to a job applicant or employee affected by these known limitations, unless the employer can demonstrate that doing so would impose an undue hardship.